Correlation Between Sixt Leasing and Australian Agricultural
Can any of the company-specific risk be diversified away by investing in both Sixt Leasing and Australian Agricultural at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Sixt Leasing and Australian Agricultural into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sixt Leasing SE and Australian Agricultural, you can compare the effects of market volatilities on Sixt Leasing and Australian Agricultural and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Sixt Leasing with a short position of Australian Agricultural. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sixt Leasing and Australian Agricultural.
Diversification Opportunities for Sixt Leasing and Australian Agricultural
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sixt and Australian is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Sixt Leasing SE and Australian Agricultural in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australian Agricultural and Sixt Leasing is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Sixt Leasing SE are associated (or correlated) with Australian Agricultural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australian Agricultural has no effect on the direction of Sixt Leasing i.e., Sixt Leasing and Australian Agricultural go up and down completely randomly.
Pair Corralation between Sixt Leasing and Australian Agricultural
Assuming the 90 days trading horizon Sixt Leasing SE is expected to generate 0.8 times more return on investment than Australian Agricultural. However, Sixt Leasing SE is 1.24 times less risky than Australian Agricultural. It trades about -0.01 of its potential returns per unit of risk. Australian Agricultural is currently generating about -0.02 per unit of risk. If you would invest 1,093 in Sixt Leasing SE on September 12, 2024 and sell it today you would lose (133.00) from holding Sixt Leasing SE or give up 12.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sixt Leasing SE vs. Australian Agricultural
Performance |
| Timeline |
| Sixt Leasing SE |
| Australian Agricultural |
Sixt Leasing and Australian Agricultural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sixt Leasing and Australian Agricultural
The main advantage of trading using opposite Sixt Leasing and Australian Agricultural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sixt Leasing position performs unexpectedly, Australian Agricultural can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Australian Agricultural will offset losses from the drop in Australian Agricultural's long position.| Sixt Leasing vs. Apple Inc | Sixt Leasing vs. Apple Inc | Sixt Leasing vs. Apple Inc | Sixt Leasing vs. Apple Inc |
| Australian Agricultural vs. Marie Brizard Wine | Australian Agricultural vs. Natural Health Trends | Australian Agricultural vs. Sixt Leasing SE | Australian Agricultural vs. Air Lease |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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